$1.2B deal reached on Calgary arena project that replaces Saddledome — mostly with public funds
City officials say they've reached a deal in principle to replace Calgary's aging Saddledome.
"A great deal of work has taken place to bring us to this milestone day," Calgary Mayor Jyoti Gondek said Tuesday.
The arena would be the new home of the Calgary Flames of the NHL and anchor the Rivers District, which includes East Village and Victoria Park, the city said.
The costs, as announced Tuesday, total more than $1.2 billion.
That's significantly higher than the previous arena estimate, which had increased to $634 million when CSEC, owner of the Flames, withdrew. That deal involved more than $300 million in public money. Talks restarted late last year.
But the funding deal announced Tuesday would also be allocated toward a new community rink, new public infrastructure and new transportation connections. The costs as announced are as follows:
Calgary would contribute $537 million to fund development of the event centre, parking structure, an enclosed plaza and 25 per cent of the community rink. The event centre would be owned by the city.
Calgary Sports and Entertainment Corporation (CSEC) would contribute $40 million upfront and $17 million per year, increasing one per cent each year, over 35 years. That money would go toward event centre costs, as well as parking, the enclosed plaza and 25 per cent of the community rink. It would also contribute $1.5 million per year to community sports.
The province would contribute $300 million toward related infrastructure work — including transportation improvements, land, infrastructure and site costs. It would also contribute $30 million to fund 50 per cent of the community rink. The province would also pay for the demolition of the Saddledome.
The announcement took place in the parking lot at 14th Avenue and Fifth Street S.E., the expected home of the new event centre, just a short walk from the Saddledome.
When asked how this announcement would stand the test of time, Gondek said the project this time around was bigger than just the arena.
"The event centre and the community arena are one component of building out this district. The infrastructure that previously wasn't talked about is now on display," Gondek said.
Smith hopes for 'mandate' to proceed with project
Calgary municipal officials have, for months, been asking for more money to support ongoing downtown revitalization projects.
On Tuesday, Alberta Premier Danielle Smith said the province viewed investments in public infrastructure as the best way to do that.
"You know, I would have loved for it to have been done months ago, but I think it is pretty clear that this is an important decision. It's a big amount of money," Smith said.
"We wanted to make sure that it could be debated during the election, and we'd hoped we'd be able to get a mandate from the people of Calgary to go ahead with it."
The provincial government wasn't involved in negotiations, though Smith has often said the province would support a new downtown arena. The announcement took place less than a week before the writ is dropped for the upcoming provincial election.
When asked whether it was necessary for the United Conservative Party to get re-elected for the deal to proceed, Smith said she thought it should go ahead "regardless."
"When you look at how we're intending to fund it, it would be over three years, $100 million a year. This is the kind of thing that the province invests in all the time," Smith said.
NDP Leader Rachel Notley said her party is committed to revitalizing Calgary's downtown, but she also took note of the project's growing price tag.
"And while the original version laid out a 50-50 private-public partnership, taxpayers are now responsible for more than 70 per cent of the cost," Notley said in a statement.
"The commitment has increased. We believe all voters would expect their elected representatives to do due diligence on the economics and fiscal value of a capital project this size."
Notley said the NDP would review the deal and consult with Albertans in the coming days.
Coun. Sonya Sharp, chair of the city's event centre committee, said she expects whichever government wins the upcoming election would honour the deal.
Behind closed doors, city council had been presented with an update earlier this morning on the arena talks by negotiators. It later voted unanimously to adopt confidential recommendations and authorize a public announcement.
Those talks were characterized as being a "fresh start," with the finances, design and even location put back on the table — even the potential of reviving of a costlier West Village plan.
City administration is now tasked with starting formal discussions on definitive agreements, which are expected to get underway through spring and summer 2023.
Investment hard to justify, says sports economist
Moshe Lander, a sports economist and senior economics lecturer at Concordia University, doesn't understand how spending this much in taxpayer dollars is justifiable.
He is also skeptical of claims the project will attract the kind of events discussed during Tuesday's announcement — including concerts or the NHL All-Star Game.
"The economic reality is that it never makes sense to put public money into arenas and stadiums. It will never pay for itself. That's that's just the reality," Lander said.
"If they think that they're doing it because it's a great investment, it's not. …That's not going to change my disposable income as a Calgary resident. My income is determined by my job. My job does not depend on the Flames."
